Shares of Taiwanese and South Korean solar power equipment makers rose after the US approved incentives for the industry and South Korea said it planned investments in solar energy.
Motech Industries Inc (茂迪), the nation’s biggest solar-cell maker by market value, rose 6.9 percent to close at NT$170 (US$5.30), a two-week high. E-ton Solar Tech Co (益通光能), the third-largest, gained 6.8 percent to NT$244.5 in Taipei, the highest since Sept. 11.
DC Chemical Co, the No. 2 polysilicon maker in Asia, advanced 6.6 percent to 332,500 won (US$287) in Seoul, the highest close since Aug. 18.
The US Senate yesterday passed a US$17 billion energy tax measure that gives a boost to the solar-power industry and extends tax credits for wind and refineries that process heavy oil.
South Korea plans to spend 99.4 trillion won by 2013 on 22 industries including energy and technology, the government said on Monday.
“The US energy bill helped lift solar stocks,” said Hsieh Chang-yo, analyst at Capital Securities Corp (群益證券), who has a “buy” rating on Motech and E-ton. “The legislation will increase demand for solar energy.”
MORE JOBS
First Solar Inc, Suntech Power Holdings Co (尚德), SunPower Corp and other companies would create 441,000 permanent jobs and inject US$232 billion in new spending into the economy by 2016 because of the US tax credits, according to a study commissioned by Resch’s group. DC Chemical supplies polysilicon to Suntech.
This week’s announcement from the South Korean government followed President Lee Myung-bak’s pledge on Aug. 15 to seek “low carbon, green growth,” referring to sustainable energy use to help reduce greenhouse gas emissions and environmental pollution.
DC Chemical gained for the fourth day, its longest winning streak since July.
The polysilicon it produces is the most expensive component used in solar panels.
“The government’s plan reignited investors’ interest in DC Chemical, which had been battered in the wake of global financial turmoil,” said Kim Young-jin, an analyst at KB Investment & Securities Co.
PRICE SLUMP
The stock slumped 11 percent on Tuesday last week as mounting credit losses and a surge in banks’ borrowing costs prompted investors to sell riskier assets in emerging markets. It has since gained 22 percent.
The advance in solar-equipment makers also followed gains in oil prices, which helps to make producing power from the sun cost effective. Crude has gained 17 percent since Tuesday last week on speculation the US government’s proposed rescue plan for the finance industry will spur demand.
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